Show and Tell: The Office of Fair Trading is Looking at Universities (again)

And they are looking for a lot of information.

Back in October 2013 the Office of Fair Trading (OFT) issued a call for information on the undergraduate part of the higher education sector in England.

This follows the earlier look (outcome awaited) at terms and conditions in relation to student debts and universities’ practices in relation to withholding conferment of degrees. So what is it they want to know? Quite a lot it seems:

Universities play a crucial role in the UK economy. They contribute directly to economic growth, employment and local economic activity, delivering skilled workers into the wider economy, and contributing to export earnings. In many respects, UK universities are world leaders in research and teaching.

In launching this project, the OFT wants to understand whether universities are able to compete effectively and respond to students’ increased expectations, and whether students are able to make well-informed choices, which would help drive competition.

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The OFT is particularly interested in receiving information about how universities compete, the impact regulation has on universities, and the student experience of the current system.

We will be engaging with higher education providers, students, employers, government and regulatory organisations and others with an interest in the higher education sector over the next 10 weeks by issuing information requests, arranging roundtable discussions and holding bilateral meetings. We will also be inviting comments from any other interested parties.

Once information has been gathered and submissions have been received, we will analyse the evidence we have collected in order to determine whether there is any evidence of  competition or consumer problems and whether any further action is warranted.

The focus on competition for undergraduate recruitment is an interesting one given the fee cap. But it will also be fascinating to see how they address the continuing growth in the regulatory burden on universities in this context. And we can only speculate what further action they may wish to take in the light of the findings…

More information on the call for information is in the OFT launch document.

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The Office of Fair Trading targets universities

The OFT is investigating universities’ terms and conditions.

The Office of Fair Trading, apparently at the request of the National Union of Students, has started an investigation into whether some of the sanctions imposed by universities on students, which may prevent them from progressing or graduating if they owe the university money, are unfair in relation to consumer protection legislation:

The OFT has opened an investigation under the Enterprise Act 2002 considering the terms and conditions used by some universities to prevent students from graduating or enrolling onto the next academic year or using university facilities if they owe monies to the university which relate to non-academic debts such as for accommodation or childcare, or if they engage in conduct (unrelated to academic performance) of which the university disapproves. It is considering whether such contract terms and/or practices breach the Unfair Terms in Consumer Contracts Regulations 1999, the Consumer Protection from Unfair Trading Regulations 2008 and certain other consumer protection legislation.

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As reported in the Independent the NUS is quite keen on this:

The NUS vice president for Welfare Colum McGuire said: “This has been on our radar for a while and we’ve been hoping to get some action taken. We’re really excited for the full investigation.” McQuire continued: “This came to our attention from students and unions across the country.”

It will be interesting to see how this plays out. It will be particularly important that the OFT gets a clear view on the issue of “non-academic debts” some of which, whilst they may not be explicitly academic in nature, are nevertheless inextricably linked to a student’s whole university experience. The OFT will also want to learn more about the ways in which conduct “unrelated to academic performance” can sometimes have a profound and negative impact on university life and is therefore not merely a matter of disapproval.

Writing in Outlaw.com, Pinsent Masons’ legal blog, Nicola Buchanan is pretty sure that the OFT will find universities’ actions wanting and that we will need to look at alternative approaches:

The OFT will publish initial findings in October and are likely to find the withholding of degrees for non-academic debt unfair. Universities should start planning now, and should take a leaf out of commercial organisations’ books if they are to find new and effective ways to recover non-academic debt.

So we will see where the investigation goes. The cautionary note in all of this though is really “be careful what you wish for” as the alternatives to the current set up may be far less pleasant for all concerned as Gary Attle has observed in Fusion, the Mills and Reeve blog:

We do wonder whether there may be another law at work here, namely the law of unintended consequences. What will be the consequences if universities, as academic communities, are constrained in using self-help measures in appropriate situations to manage their financial responsibilities. Will it be in the interests of students if universities are forced to resort instead to other credit control measures and debt collection procedures like commercial businesses and landlords?

Surely no-one wants to end up here?